Staying On Track During Mortgage Approval | Holiday Builders
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You've applied for a mortgage and have a pre-approval but your new home won't be completed for several months. Staying on track with your mortgage application requires discipline.
Here are some tips to avoid risking a delay or denial of final approval. 

DON'T APPLY FOR NEW CREDIT

Salespeople in department stores are trained to ask you if you'd like to save 10% by using the store credit card. Even better, they will tell you it only takes a second to get approved. Just say no. The same applies to "same as cash" credit lines allowing you to pay over time with no interest. All of these are new credit lines that increase your debt-to-income ratio. The experts recommend keeping your credit utilization under 30%. That means, if you had one credit card with a $500 limit, you want to keep charges on that card less than $150. When your debt-to-income ratio increases, it could mean you'll pay a higher interest rate, or potentially be denied a loan.

DON'T MISS CREDIT CARD OR LOAN PAYMENTS

It is always good practice to pay all your bills on time. But when it comes to your determining your credit score, your payment history is a major factor. That means always, but especially if you're in the midst of your approval process, be sure to maintain on-time payments on all of your credit card or loan payments. A great credit score helps you get the best rates on a loan. Conversely, a low credit score means you'll pay a lot more to borrow money over the life of the loan.

DON'T MAKE ANY LARGE PURCHASES

It's been your dream to take an RV and explore the country and you've found a deal on a used RV and you want it, bad. DON'T DO IT. Even if you don't have to take out a loan to make a substantial purchase, the experts tell you to keep your cash in your pocket until you've closed on your home. A major purchase is going to dent your savings.

DON'T CHANGE JOBS

We all have days where we'd like to quote that great 1970's song, "Take this job and shove it," however, when you're waiting to close on a loan, you need to stick out your current employment. Sometimes changes are unavoidable. If you are forced to make a change or elect to do so, be sure to let your lender know immediately. Remember, you've submitted pay stubs as part of your application process. All changes must be documented. An income adjustment could affect the amount of money you're allowed to borrow.

LARGE DEPOSIT? LEAVE A PAPER TRAIL

Whenever you make a large deposit to your bank account, typically $1,000 or more, you need to have a paper trail to show the origin of the money. All money needs to be documented - even if it's a gift from your dear Aunt. All major changes in your assets, personal income, or debt, can alter the terms of your mortgage offer.

HOLIDAY BUILDERS

Holiday Builders has been a leader in new home construction since 1983. With new homes and communities throughout Florida and Coastal Alabama, Holiday Builders offers homeowners a two-year warranty, double the industry standard. We work with preferred lenders in order to provide our customers with top-notch service, dedicated to new home construction.  It is important to remember that loan approval begins upon making an application and ends at closing. With longer build time cycles created by the pandemic, it takes more discipline to keep finances in check for the time it takes to complete construction. Be sure to consult your lender should you have any questions.